When most people think about bankruptcy, it leaves them with bitter thoughts. No one likes the idea of filing for bankruptcy, but the reasons behind the fear of filing do not always have grounding in reality. Quite a few myths surround bankruptcy, and this is contributing to the fear and disdain that people have when they think about filing. The truth is that sometimes, bankruptcy really is the best choice. It’s time that we dispelled and debunked those myths so people can start to get a better understanding of what it is and how it might be able to help.
The first myth with bankruptcy is that it only happens when people are careless with their money. While mismanaging finances can contribute in some cases, quite a few other things actually cause bankruptcy. Unexpected medical bills, the loss of a job, or a reduction in pay are some of the most common problems.
Second, people fear that all of their family and friends will look at them differently. When you file bankruptcy, you don’t have to tell anyone, and chances are that your social contacts will not have any idea that you even filed. You can keep it to yourself. You don’t even have to worry about your employer knowing that you filed.
Third, people fear that they will lose everything they own when they file for bankruptcy. Again, this is just a myth. Many things are exempt, including household goods, personal belongings, automobiles, and retirement savings.
Finally, people fear that bankruptcy will ruin their credit forever. That’s not the case. It will put a negative mark on your credit score, but in a few years, you will be able to start building your credit again.
San Diego residents who are searching for help in this area will want to connect with an experienced bankruptcy attorney.